Total Money Makeover

[Lisa loves Pooh]

I

I really don't understand why anyone thinks it's normal to be broke. ...


And if, as you mentioned, bankruptcy is knocking on your door (not your per se, yours as in anyones), while I'm sure no one thinks that is normal, you really do have to make serious changes.

I was trying to explain what DR's perspective was. Normal today is "buy now pay later". And there is a problem with that and that is DR's point, I think.

If you have zilch in savings--you are broke. Regardless if you can pay on your debts. Affording something is not the same as being able to pay minimum payments. And when car loans have gotten to the point that they are 72 and 84 months....something is wrong.

To really have the perspective, you need to read the book (and I'm not sure if you mentioned you did or not).

 

[Lisa loves Pooh]

If you think that $10 disappears fast, wait until you see how fast the years disappear til you need that retirement.

We are miles ahead of most people when it comes to retirement.

As far as the $10.....it was in reference to...

"this only costs $10, this only costs $5---this is only $2, it's only $15"

You may not have that bad habit--but I do.

Goody for you that your life is so on track.

 

[DMRick]

To really have the perspective, you need to read the book (and I'm not sure if you mentioned you did or not).

Yes, I did read it. I guess I think of broke as pretty much bankrupt, having no funds to pay bills. We've had times in the begining when we had no savings, and I know others here are the same..but it didn't make me feel broke.

That's great that you are miles ahead of others for retirement..then what I said wouldn't pertain to you, but to those who were thinking of not saving for retirement.

I'm not sure if the "goody for you" was you being snarky or what (and I'm not sure why you thought you had to be if it was), but I think you are misunderstanding what I wrote. Obviously, you are doing fine..but perhaps some others, don't understand that you can use a credit card responsibly, and continue to save for retirement, in spite of what the book says. If no one reading this has any money to pay anything off at all, all the books in the world won't help. It has to start by spending less than you are bringing in. I've done that, and I am not ashamed to admit we did without to not have bills and start a savings. Obviously if someone is living hand to mouth, and there is nothing save, there is nothing to use to pay off. Reading that you should pay attention to the $10 (and then don't spend it) may work for you, and that's fine (my daughet writes down everything she spends..always has, and that works for her). As I said, if someone needs the book to make them spend less than they make, or to be accountable, nothing wrong with that.

 

[can'twait]

Well, this is a great thread!

We have been struggling with this forever. DH inherited some BAD money management genes and I was raised by grandparents who were born during the Depression. Talk about night and day. He calls me cheap but I explained that cheap is when you have it and don't spend it. Also, I've noticed that people who have money have it because they don't spend it. Ever notice the wealthiest people are the stingiest? Well, how do you think they got wealthy?! Also, just because people spend, that DOES NOT mean they have it. Ever see that commercial with the guy on the lawnmower saying he has a house, country club membership and is way over his head? So true. You never know exactly what the Jones' financial situation REALLY is. Anyway, DH has come around a LOT but I'm trying to get him to pay cash only except for internet purchases and the odd times when we get stuck without enough cash in our pockets. I'm trying to get him to not go nuts at Christmas, as that always puts us over the edge. He pays the bills and whines about how the savings account is dwindling, so I said, show me the money, where's the budget? He said there's no budget. I said WHAT? Don't you make sure we spend LESS than we earn? He said, um, no. If we need it we buy it. I said, um, NOT. If we don't have the cash, we don't buy it. Period. Needless to say, the conversation is still ongoing. I have no problems with paying off credit cards in full every month but we just don't seem to be able to do that and it spirals.

As far as cars, we bought a new Honda and a new Toyota last year, only because our other cars were so old and broke down so much that we were afraid to drive them and the repair costs were rising. Mine was a "dealer" car, with 3K miles on it so we saved $3K on it, and he bought his during a promotion and got a great price and some free add-ons. We found that Hondas and Toyotas that were 4 years old were selling for only a few thousand dollars less than new ones. The newer ones had better safety ratings, and besides, you don't know where that used car has been.

RichNKatHolly: We live in Westchester. The average price of a SHACK in our town is $700K. Bananas! And Donald Trump is building luxury apartments in White Plains. Just what we need.

I agree, money management is like dieting. What works for someone else may or may not work for you, but it's interesting to read what others do.

All I can say is, if we had invested all the $ we have thrown away over the years on credit card interest, we'd be rolling in it now. Sigh.

 

[Ardenne]

DMRick, I know this is OT, but I have to ask -- what is that incredible looking dessert next to the cute little boy in your sig picture? Is that something from Disney? It looks awesome!

 

[Ardenne]

We have been struggling with this forever. DH inherited some BAD money management genes and I was raised by grandparents who were born during the Depression. Talk about night and day.

Boy, can I ever empathize with this. I was raised on Depression-era savings habits, too, with a huge aversion to debt. DH's idea of "budgeting," on the other hand, was to spend his pay until he ran out, at which point he'd spend nothing -- and subsist on bean-paste sandwiches and ramen noodles -- until he got paid again. His "groceries" probably didn't cost him more than $2/week, so he managed ok that way, but it wasn't a style of living I was comfortable with.

That first year after we got married took a huge amount of adjustment, but we've pretty much hit a happy balance by now, thank goodness!

 

[DMRick]

DMRick, I know this is OT, but I have to ask -- what is that incredible looking dessert next to the cute little boy in your sig picture? Is that something from Disney? It looks awesome!

It's the Kitchen Sink from Beaches and Cream. That's my grandson, and he just loved it. I didn't care for all the mixed flavors, but it was fun. It's about $23 or so..we got it back when you could use the $11 vouchers for a meal and that was included. He talked about it for months before the trip (it was all his!) and months after. He did a good job on it.

and subsist on bean-paste sandwiches and ramen noodles. His "groceries" probably didn't cost him more than $2/week

Hmm..did you marry my son? Is this his wife in incognitto? Of course he ate like that, because he liked those things..and he wanted to hold onto his money LOL! What a difference a wife made.

 

[TNKBELL]

I think it's misleading to assume that because someone has a nice home and newer cars that they are not struggling. That describes us to a tee! We live paycheck to paycheck and live in nice neighborhood and drive decent vehicles. DR's book is a Godsend to us because we needed to realize that WE DON"T NEED IT NOW!! I've been so concerned in the past with keeping up appearances that I justified purchases on credit and loans. Since I've starting homeschooling (4 years ago) I have been educating myself on financial matters and I feel that we are still in the process of a total metamorphisis. Lisa... I know what you mean about $10 here and $5 there, that's how we put $5000.00 on our credit card! I think the thing after reading TMM that keeps replaying in my head over and over is "You have to live like no one else, so that someday you can live like no one else." This book has helped us so much!
Even though we are still contributing to our 401K, I still feel like we are still in line with everything in DR's books. I agree with other posters who said that it's throwing away free money if your company matches.
DMRICK... I think you are just an exception to how most people really live, you have a real handle on finances and could teach this generation a lot about money and spending. Am I wrong in assuming that most people in my age bracket 20's-30's are just trying to have it all now?

 

[DMRick]

Actually, I think cheap is when someone doesn't buy anything, even if they need it. I like to think I'm frugal and careful. I spend it, but I like to get the most for my money. For instance, I vacation, but would never stay in a deluxe..no interest at all, unless they suddenly started to cost the same as values and mods LOL (I know a cheap person who would never spend money on a vacation at all, unless he won it and no taxes were due).

I eat out, but use coupons and discounts (same person as above, only buys store brands at the supermarket, even if he doesn't like them. Now I buy my share, but good grief, I wouldn't if I didn't like them) usually. I'll go out to a nice place without a coupon without being upset, but I am happy when I get to take advantage of the discounts. I love Restaurant.com.

I buy new cars, but keep the old for a long time, and bargain and bargain on the new. The person above..well, his car is so bad, he can't drive from his state to ours, because the car won't make it. And when his tailpipe broke..he used (and still uses) a tomato can to fix it.

I buy gifts when invited to an occasion (or give money, depending), but I try to find something the person will like at less than full price. The person above, will not respond to invites..he thinks if they think he didn't get the invite, he doesn't need to buy a gift.

And he only can get calls into his phone, because he has some special pricing, where it only costs .10 a minute to call out, and he won't spend it!

Even if he admired a new coat, if it doesn't come fromt eh second hand shop, he would never buy it.

I think he's cheap, not frugal or careful LOL..so does he.

Oh, did I mention he prob has every penny he ever earned? But not much happinest. Oh, and it's a close relative LOL!

He calls me cheap but I explained that cheap is when you have it and don't spend it. Also, I've noticed that people who have money have it because they don't spend it. Ever notice the wealthiest people are the stingiest? Well, how do you think they got wealthy?!

 

[Spoisal]

Am I wrong in assuming that most people in my age bracket 20's-30's are just trying to have it all now?

You are so right! At least with the people I know.

I just ordered this book from Amazon (ok, you must use a CC to order online! HAHA!!).

We don't have any CC debt or car payments, but we do have a monster mortgage. well, to me it is a monster, but I guess it is average? 325K. (with escrows it is 2150/mo). We are guilty of using our house as an ATM, but the money that we have taken out of our home's equity has paid for major home improvements (new kitchen, 2 rooms added on, and an inground pool). This was to avoid moving, which would have cost more - we outgrew our home - so we thought. We really need to get this mortgage paid off & I am hoping that this book will give me some tools & ideas to help.

 

[Spoisal]

Just switched from AKL to POP for our November trip & saved almost $1200!! Now THAT feels good. bye bye animals though.........

 

[DMRick]

DMRICK... I think you are just an exception to how most people really live, you have a real handle on finances and could teach this generation a lot about money and spending. Am I wrong in assuming that most people in my age bracket 20's-30's are just trying to have it all now?

Actually, I did teach a Sunday School class on finances a number of years ago

I agree that some are trying to have it all, but no, I really don't think most. I have three children between the ages of 30 and 37, several couples in church your age, and lots of young neighbors. I'm pretty close to them, and while I would say most do not have savings beyond a few paychecks, I don't consider them broke, and I don't think they do either. I've taught a few of them to eBay, and I know that has been good for their finances. While many may be existing from paycheck to paycheck, I do not believe most are racking up their credit cards, but are paying for the cars and housing they have now. But as long as they are paying it, eventually, their paychecks will go up (depending on their jobs, but around here, most are working in the types of jobs that have raises), and savings would go up then, as opposed to overpaying cc cards. We didn't always have savings, but always had a car payment and house payment, and our kids went to private school. Not easy on a blue collar salary, but doable. I wonder if we see it more on this board, because so many of us want and get that Disney vacation.

I guess I just have to repeat what I said earlier. Spend less than you bring in, and eventually you'll do ok and put that in savings. For us, we've always paid off the cc monthly (except for a time when my husband was on strike..and we made just payments, until we knew when it would end), and if you don't want to do that, a book won't do it for you. I feel bad, that so many on this thread, have gotten in over their heads. It must be a very bad feeling, and I'm sure the cause of marital arguments. When money is short, usually, so are tempers.

 

[DMRick]

Just switched from AKL to POP for our November trip & saved almost $1200!! Now THAT feels good. bye bye animals though.........

But you can go visit them. It's a great resort to visit. Good job, and that $1200 will go a long way!!

 

[RichNKatHolly]

Well, this is a great thread!

RichNKatHolly: We live in Westchester. The average price of a SHACK in our town is $700K. Bananas! And Donald Trump is building luxury apartments in White Plains. Just what we need.

I agree, money management is like dieting. What works for someone else may or may not work for you, but it's interesting to read what others do.

All I can say is, if we had invested all the $ we have thrown away over the years on credit card interest, we'd be rolling in it now. Sigh.

Westchester is quite beautiful. I was there on a route of jobs a few months ago. I can see what you mean about the prices! Donald Trump has 2 sets of apartments here too, but they are a bit older. You should see what you have to do to rent there - they would NEVER take us!!

DMRick - I did order the book and I cannot wait to get it. I'm sure that alot of what he says is common sense, but some of us (most people in the US from what I've seen and read) need that physical peice of bound paper to encourage us to keep on the right track. There is a huge push and desire to have all these fabulous things, vacations, homes, cars, etc. but not many of us make the $$ to get them. Most of us make just enough (or just not enough) to put food on the table. I would assume that most people my DH and I come into contact with think we just have the greatest, carefree life. That is soooo not the case. We do have no debt, but that is because of several past mistakes that leave us with no choice (no one in their right mind will give us a credit card, which is actually working for us, because it's very tempting for me to take it and max it out all in one day).

What I'm saying, if for some of us, it is hard to say no. Hard to stay away from the mall. Not because I want to keep up with the Joneses, but I like STUFF, expensive stuff. I bet if I never watched MTV or read magazines I wouldn't desire half of the stuff I do.

Sorry so long, I have just reread it and I rambled!

 

[dvcgirl]

I

I really don't understand why anyone thinks it's normal to be broke. It may be normal, when you are young and just starting out to have to work harder than someone who has finally paid off the last of the kids school loans (school loans=cheap interest loans), and buy a little less than you would like, and use coupons at the supermarket (I still do) but I never would think being "broke" is normal. I know many young (including three of my own) kids starting out struggling, to get together that house down payment, but not broke. I live in a very working class neighborhood, and there is a newish car in each driveway, many of them vacation once a year, some camp (or own camps), some have both parents working, and some are sahm's. We visit outside often, when I usually have stuff from my garden to share. They talk, I listen, and while they aren't rich, I don't believe most of them think they are broke. They have garage sales and sell on eBay and babysit for extra vacation money, but broke to me, means you can't do those vacations, buy the newer car, send the kids off to private school, or even afford food on the table, etc. If you are doing those things, you may not have cash for yet other things, but I wouldn't consider you broke.
However, if this book/program will work for you, then go for it. I personally think people know what and how they should be spending (spend less than you bring in), to not have even more debt, but if you feel the need to be guided from a book, then why not?



If you think that $10 disappears fast, wait until you see how fast the years disappear til you need that retirement. It's much easier to start saving for retirement now, than later, when you only have a few years to do it. Later, you may not have the opportunity to have the matching, and believe me, it takes almost as much money to live as a retired person, than when you were working, and that matching is a blessing. If you truly can't afford to live right now (shelter/food/clothing), than you are right..you need to eat, more than you need to retire. You may just not be someone who gets to retire

And if, as you mentioned, bankruptcy is knocking on your door (not your per se, yours as in anyones), while I'm sure no one thinks that is normal, you really do have to make serious changes.

Ahhh, well I think you are jumping to a huge conclusion to think that people who have nice new cars and take yearly vacations are not broke. And even if they're not broke, some are probably not saving for retirement (and if they are it may not be enough) and many probably don't have even the slightest hint of an emergency fund. These boards are full of people like that. According to Motley Fool the average American household is carrying $8,562 of credit card debt. Since many of us have no CC debt, you can imagine how much debt some people are in. We are currently at a zero savings rate as well in the US. It's just mind boggling.

Times have changed, when I was a kid growing up my parents lived paycheck to paycheck. Many, many people do these days as well. The difference is that when I was a kid, there were no yearly vacations to WDW or combo WDW/Disney cruise visits. We took lots of day trips and maybe two vacations to Florida. But we didn't fly...we drove. When I was a kid in the 70s, maybe two or three kids went on trips like the average trip taken today. I have a little cousin who is seven years old who lives in a blue-collar neighborhood in NJ. She's the only kid in her class who has not been to WDW. There weren't luxury cars sitting in middle class neighborhood driveways. The difference....credit is given to anyone and everyone now. And many, many people in our country are up to their neck in debt. And many are not saving for retirement. Most people don't even have a clue as to how much money you actually need in retirement...and when they find out, it's positively horrifying to them.

The bankruptcy laws have been so lax in this country and so it was very easy for people to claim bankruptcy, run up cards and then just be able to start over. Now, it will not be nearly as easy for people to get out of trouble. So, hopefully people will be a little more mindful of the debt that they're carrying.

 

[ziggystardust]

What I'm saying, if for some of us, it is hard to say no. Hard to stay away from the mall. Not because I want to keep up with the Joneses, but I like STUFF, expensive stuff. I bet if I never watched MTV or read magazines I wouldn't desire half of the stuff I do.

I'm the same way. I want everything, and everything is expensive. I'm getting better though, not buying things just b/c its on sale. I'm putting things on hold, and if I am actually thinking about it the next day, I'll go back. 90% of the time I don't.

I am trying my hardest to clean up my debt, its not much, but still too much for me. I live on LI, so I know first hand about housing costs. Scares me to think I may never own a home here.

When you ordered your book, did you get the workbook too?

 

[Ardenne]

It's the Kitchen Sink from Beaches and Cream. That's my grandson, and he just loved it. I didn't care for all the mixed flavors, but it was fun. It's about $23 or so..we got it back when you could use the $11 vouchers for a meal and that was included. He talked about it for months before the trip (it was all his!) and months after. He did a good job on it.

Thanks for the info - I'll have to let my kids try that when we go!

Hmm..did you marry my son? Is this his wife in incognitto? Of course he ate like that, because he liked those things..and he wanted to hold onto his money LOL! What a difference a wife made.

I guess they're just kindred spirits. I'm pretty sure my in-laws have never even considered joining a Disney board!

 

[RichNKatHolly]

I'm the same way. I want everything, and everything is expensive. I'm getting better though, not buying things just b/c its on sale. I'm putting things on hold, and if I am actually thinking about it the next day, I'll go back. 90% of the time I don't.

I am trying my hardest to clean up my debt, its not much, but still too much for me. I live on LI, so I know first hand about housing costs. Scares me to think I may never own a home here.

When you ordered your book, did you get the workbook too?

I did not get the workbook because I didn't want to spend too much. I did order the Kid's book though. My DS totally takes after me - wants everything! I wasn't sure I would need the workbook because we do not have any debt, we just don't have any anything. We work, pay the bills (sometimes we don't quite make those) and then it's gone. We have been lucky with little windfalls every now and then and that is how we pay for vacations. We will though be taking a break from vacation for a while - at least big ticket vacations anyway.

We rent also ($1600 a month). With the rents the way they are, the housing market being the way it is, and my DHs low salary, I don't think we'll own anytime soon. I know LI is worse even.

The shopping bug is hard to beat! I haven't bought a thing in weeks, it stinks. Good luck - let me know if you want to sponsor each other in some sort of 12 step program!

 

[C.Ann]

Just switched from AKL to POP for our November trip & saved almost $1200!! Now THAT feels good. bye bye animals though.........

--------------

I'm with you! LOL You're going to be in Disney anyhow, so grab the $1200 and spend half a day in AK...

 

[DMRick]

I think our opinions of broke may differer. When I think of broke, I think of not being able to buy neccesities. I understand lots of people do not have savings..however I don't think that makes a person broke. It means IMO if there was an emergency, they may be in trouble. But I talk to my kids (we vacation often together, spend lots of time together, and we discuss finances), and other young people I know. Close enough to them to know if they are in trouble. When I say vacations, I'm not talking about the $5,000 or more Disney vacations. There are nice vacations to be had for a lot less. That won't break a bank that has planned for them. While they may not yet, be all saving for retirement, I know many are. We have two big places many people are employed here, and the matching is a hard thing to give up. Most I have talked with feel it comes out of their pay, and they never had it to begin with.
I've not said that no one should get the book..but I wonder..how many realize that you still even with the book, have to spend less money on "stuff" to make it work? It's not a miracle answer. Most I'm reading here, will not be able to pay off a $200 - 300,000 home mortage, no matter how many books they buy. It still takes control. I would start by writing down everything you buy..and see where you can save on that. The trouble with liking stuff, unless you have control, you will continue to like stuff. A book won't turn that off

By the way..the cars sitting in my neighborhood are not luxury cars..I hope I didn't give anyone that opinion.

Ahhh, well I think you are jumping to a huge conclusion to think that people who have nice new cars and take yearly vacations are not broke. And even if they're not broke, some are probably not saving for retirement (and if they are it may not be enough) and many probably don't have even the slightest hint of an emergency fund.